QUESTION 1

"A bread price subsidy to benefit the poor is economically inefficient". (a) Analyse this statement using a diagram. (Assume constant production costs.) (b) Analyse with diagrams which other grants or transfers the South African government can use to relieve the plight of the unemployed, especially during the current coronavirus, COVID-19, situation? (c) With the aid of a diagram, show the effect of an income transfer on work effort also.